These households, Mr Kelly says, are struggling to meet their accommodation needs in the private rented sector.

Mr Kelly told Labour TDs tonight the scheme will ensure "intermediate households in the private rental market are not forced into seeking social housing support" and will also contribute towards "stimulating the construction of new residential properties".

In return for offering rents of 70-80pc of the market rate, developers will be offered a series of concessions including:

* a low-interest loan

* a grant

* a provision of land

* a loan guarantee on private borrowing

Mr Kelly revealed the plans in a lengthy housing document presented to the Labour parliamentary party meeting.